8-KMaterial Agreements

REGENERON PHARMACEUTICALS, INC. 8-K Report, Material Agreement (Dec 22, 2005)

Filed December 22, 2005For Securities:REGN

Summary

Regeneron Pharmaceuticals, Inc. (REGN) announced a significant expansion of its collaboration with Aventis Pharmaceuticals Inc. (now part of sanofi-aventis Group) concerning the development of its Vascular Endothelial Growth Factor (VEGF) Trap. The Third Amendment to their existing agreement, dated September 5, 2003, now includes Japan in the collaborative territory, extending the global reach for the VEGF Trap's development across all indications except for intraocular delivery. This expansion comes with immediate financial benefits for Regeneron, including an upfront payment of $25 million from Aventis. Furthermore, Regeneron is eligible for up to $40 million in milestone payments tied to Japanese regulatory approvals and will receive approximately 35% of annual sales of the VEGF Trap in Japan as royalties, subject to adjustments. This amendment solidifies the global development and commercialization strategy for the VEGF Trap, with Aventis shouldering the development costs.

Key Highlights

  • 1Regeneron and Aventis (sanofi-aventis Group) entered into a Third Amendment to their Collaboration Agreement for the VEGF Trap.
  • 2The collaboration territory for the VEGF Trap has been expanded to include Japan.
  • 3Regeneron will receive an upfront payment of $25 million from Aventis in connection with the amendment.
  • 4Regeneron is eligible for up to $40 million in milestone payments related to Japanese regulatory approvals of the VEGF Trap.
  • 5Regeneron will receive approximately 35% royalties on annual sales of the VEGF Trap in Japan.
  • 6Aventis is responsible for funding all worldwide VEGF Trap development costs.
  • 7Regeneron is eligible for total milestone payments of up to $400 million for the VEGF Trap, including $360 million for US and EU approvals.

Frequently Asked Questions

The Third Amendment expands the geographical territory for the VEGF Trap collaboration to include Japan, allowing for global development and commercialization efforts across most indications. This significantly broadens the market potential for the drug.

Regeneron receives an upfront payment of $25 million, is eligible for up to $40 million in milestone payments tied to Japanese regulatory approvals, and will earn approximately 35% in royalties on VEGF Trap sales in Japan. Additionally, they are eligible for up to $400 million in total milestones for the VEGF Trap, including those for US and EU approvals.

Under the amended agreement, Aventis is responsible for funding all worldwide VEGF Trap development costs. Regeneron will reimburse Aventis for half of these costs from its share of profits and Japan royalties after commercialization.

Yes, Regeneron is entitled to share equally in any profits related to VEGF Trap sales outside of Japan. Reimbursement of development costs will be made from Regeneron's share of these profits.